Bilimoria plans Cobra Beer sale

LONDON: Karan Bilimoria, prominent Indian- origin entrepreneur, is considering the sale of his multi-million pound Cobra Beer empire that he began from the back of his car in 1989. According to marketing documents prepared for financial institutions, the company's sale is expected within the next three years.
Cobra Beer has grown into a major company that has a significant market share in the UK as well as in India, in the last 18 months it has struck deals with nine regional brewers and has acquired a majority stake in another.
The documents identify companies: SABMiller, InBev, Molson Coors, Carlsberg and Anheuser-Busch as "obvious buyers" with others such as Heineken, Kirin and Indian-owned companies also "possible buyers".
The Sunday Telegraph today reported that Cobra is trying to secure £13 million from investors to help fund its rapid expansion in India.
Bilimoria said: "It's a very likely option that someone comes along and makes us an offer we cannot refuse. I am not saying I am definitely going to sell the company. What I am saying is that definitely within three years we will have to have a major event."
He pointed SABMiller's acquisition of Foster's Indian operations in 2006 as an indication of the interest that the leading international brewers have in the fast growing Indian market. Cobra is reported to be using investment bank N M Rothschild and City Capital Corporation, an advisory firm, to help it find new investment.
The company's revenue grew 34% last year. This year it expects 44.4 million pounds in sales and is aiming to touch 100 million pounds by 2009. Much of the company's growth is expected to come from India. Cobra sold 4.1 million cases of beer worldwide last year, with 23% of its sales in India. Bilimoria said to the newspaper that his King Cobra strong beer and milder Cobra Premium would double their Indian sales this year.
"As we continue to grow we are becoming more and more valuable, particularly because of growth in India," he said. "We are brewing in nine locations and we now own a brewer.
Our sales in India will have grown by 100% by July. We are growing very rapidly so it's becoming increasingly valuable to a large player in the Indian market or someone wanting to break into India." He added that a trade sale was not the only option open to Cobra. It will also consider a strategic partnership with an international drinks group or a flotation on a stock market, either in London or India.